Preparing for the Challenges of Aging

cognitive impairment
With aging comes many blessing and challenges. One of those challenges is the possibility of cognitive impairment at some point in your life. A solid estate plan addresses that issue.

For family members, the warning signs can be hard to spot, and the person may even try to hide them. There may be confusion over regularly performed tasks, forgetting to pay a bill or missing a meeting. According to the Taunton Gazette’s article “Preparing for complications associated with aging,” family members must keep their eyes open for clues, including lapses in judgement about financial matters, like sending money to a phone call scammer, or changes in behavior.

A conversation should be part of estate planning or when talking about regular financial planning. Address the potential problems, while parents still have mental capacity. As soon as any warning signs are evident, the time frame for preparedness needs to speed up.

When discussing the estate plan, several documents are used to prepare for cognitive impairment. In addition to a last will and testament, the estate plan needs to have a health care power of attorney and a durable power of attorney.

A Health Care Power of Attorney is a legal document that gives caretakers, usually an adult child, and sometimes a trusted friend, the legal ability to speak with health care providers about medical treatment. These documents need to be kept current so there are no obstacles to their use. Every three to five years, they should be updated, or as circumstances change. Without them, the caretaker won’t be able to have a conversation with a loved one’s doctor regarding any health issues, including cognitive impairment.

A Durable Power of Attorney allows another person, who is called the “agent,” to handle almost everything in your life. This should be current, since many banks and financial institutions will balk if they are handed a POA that is more than five years old – sending it to their legal department and holding things up while they await an answer.

Cognitive impairment is an important reason many aging adults rely on trusts. Unlike assets held in an individual’s name, assets owned by a trust can easily be managed by a trustee. If you’re the trustee and become mentally incapacitated, your chosen back-up trustee can manage the assets. The trustee needs to be someone you trust who is willing to take on this task.

One of the challenges of cognitive impairment is transferring the management of a person’s assets and their health care decisions to someone who is not impaired. The aging parent may be very good at hiding their disability, and they can often mislead family members for extended periods of time.

One unusual and creative idea: create a “disability panel” or “disability board of directors”— a group of family members, friends, or beneficiaries who decide if the loved one needs help. This is far easier than relying on doctors to declare incompetency or needing to apply to the court for guardianship when you show signs of cognitive impairment.

Your estate planning attorney will be able to help you prepare for the challenges of aging by creating a plan for incapacity as part of your overall estate plan.

Reference: Taunton Gazette (July 12, 2019) “Preparing for complications associated with aging,”

Other articles you may find interesting: 

What Types of Senior Care are Available for Veterans?

Dementia: Losing Your Self

***Want to learn more about how to protect your family from the government, lawsuits, accidental disinheritance, or nursing homes? Click THIS LINK to book a seat at one of our upcoming fun and educational workshops.***

Does Mom Have to Pay Dad’s Credit Card Debt after He Dies?

credit card debt
Consult with a probate attorney before paying a deceased person’s credit card debts.

When a family is grieving after the death of a loved one, the last thing any of them wants to deal with is unpaid debts and debt collectors.

nj.com’s article asks “Is mom liable for my dead father’s credit card debt?” The answer: generally, any unpaid debts are paid from the deceased person’s estate.

In many states, family members, including the surviving spouse, typically aren’t required to pay the debts from their own assets, unless they co-signed on the account or loan. This includes credit card debt.

All the stuff that a person owns at the time of death, which includes everything from money in the bank to their possessions to debts they owe, is called an estate. When the deceased person has debt, the executor of the estate will go through the probate process.

During the probate process, all the deceased’s debts are paid off from the estate’s assets. Some assets—like retirement accounts, IRAs and life insurance proceeds—aren’t included in the probate process. As a result, these accounts may not be available to pay creditors. Other assets can be sold to pay off outstanding debts.

A relative or the estate executor will typically notify any lenders, like credit card companies, when that person passes away. The credit card company will then contact the executor about any balances due. Note: the creditor can’t add any additional fees, while the estate is being settled, and the executor SHOULD NOT arrange to make any payments without first consulting with a probate attorney.

If there’s not enough money in the estate to cover credit card debts, the card issuer may have no recourse. The executor and the heirs aren’t responsible for these debts. Unlike some debts, like a mortgage or a car loan, most credit card debt isn’t secured. Therefore, the credit card company may need to write off that debt as a loss.

You should start learning about the probate process in your state to have the best defense for dealing with creditors and debt collectors.

If you need help, talk to an experienced estate planning attorney.

Reference: nj.com (Jan. 15, 2020) “Is mom liable for my dead father’s credit card debt?”

Other articles you may find interesting: 

College Kids Need Estate Planning,Too

What’s a Lady Bird Deed?

***Want to learn more about how to protect your family from the government, lawsuits, accidental disinheritance, or nursing homes? Click THIS LINK to book a seat at one of our upcoming fun and educational workshops.***

Financial Infidelity that Appears after One Spouse Dies

Financial infidelity
Financial infidelity – when one spouse is making significant financial moves without the knowledge of the other.

When one member of a couple handles all the finances and dies, the surviving spouse is often left with a serious problem. Locating investment accounts, passwords to online accounts and other important information becomes an overwhelming issue, according to the article “Why smart people don’t recognize financial infidelity” from The Mercury. It’s a relatively new term, but not a new dilemma.

Take the case of a recently widowed or divorced person who has met a new person who appears to be the new love of their lives. The person is kind to them, supportive, and well, perfect. It’s hard to believe that such a seemingly wonderful person could have a dark side. However, whenever a new friend, hobby, or investment idea starts having a major impact on the person’s financial life, or if they have simply been careless with their financial affairs, the impact can become catastrophic.

People who are not confident in their ability to manage money or investments often hand off that responsibility willingly to their partner. If in a prior life, your spouse managed all of the household money and you did not learn how to handle the tasks that are required to run a home or manage an investment portfolio (or work with advisors), you might be a little too willing to pass that job on to a new partner.

You may fall into the traditional role of one person being responsible for the outside bills and investments and the other handling all of the household tasks.

Financial infidelity also includes things like having accounts that are not known to the other spouse or taking out credit cards without the other person’s knowledge. The same goes for one spouse suddenly putting a lifetime of savings into a single investment, or someone who knows little about markets spending a great deal of time day trading with the family’s savings. Gambling or excessive spending can also be financial infidelity.

What can you do? Here are a few tips.

Don’t give up control of finances. It’s not uncommon for people to combine finances when they are first married. However, if you’re heading into a second marriage, you may want to keep your money separate at first. Not paying attention to what’s going on with your money at any stage of life can lead to problems.

Educate yourself about money. If one of you is better at money management, that’s fine—but the one who isn’t needs to get up to speed. There are classes in personal finance at the local high school or college, so cost should not be an issue.

Speak up. If one person is made to feel like they can’t talk with their partner about money, there’s a problem. There may be accusations of trust—but trust is not granted automatically. Trust is built between a couple through experience. Financial transparency between partners is a sign of respect.

Read and understand documents before you sign anything. If you have questions, don’t sign anything until you have a full understanding. You should not be pressured into making decisions or commitments until you’re completely comfortable with all of the information. If you don’t get a satisfactory answer, don’t sign.

Part of your protection from financial infidelity is an estate plan. Speak with an estate planning attorney about creating a plan to protect your assets after you pass and while you are living. An estate plan needs to include – at a minimum – a Will, a Durable Power of Attorney, Designation of Health Care Surrogate, and may include Trusts, Living Wills, and other documents, depending upon your situation.

Reference: The Mercury (Jan. 29, 2020) “Why smart people don’t recognize financial infidelity”

Other articles you may find interesting: 

Special People, Special Trusts: SNT FAQs

Power of Attorney vs. Guardianship

***Want to learn more about how to protect your family from the government, lawsuits, accidental disinheritance, or nursing homes? Click THIS LINK to book a seat at one of our upcoming fun and educational workshops.***

Beneficiary Designations and Divorce

beneficiary designations
What happens if your ex-spouse is named on your Will or Trust, or on a beneficiary designation form?

If you’re divorced, have you checked your beneficiary designations and the people you’ve named in your estate planning documents lately? If you completed any of these documents before your divorce was final, you may be in for a nasty surprise.

Your ex-spouse may still have legal authority to make medical decisions for you, access your bank accounts, or even decide whether or not you get to live or die, or are buried or cremated. He may be named as your personal representative (executor) or trustee on your Will or Trust. Or maybe she’s still listed as a beneficiary under your Will or Revocable Trust, or on your 401(k) or pension.

But better to get the surprise now – while you can still fix it. What would happen if you died before fixing it?

As usual, the government has a plan for you – whether you like it or not.

In Florida, we have statutes that essentially kill off your ex-spouse if he or she is still named in your Will, Trust, or as a beneficiary on your bank or investment account after your divorce was final. Our statutes even include the beneficiary designation forms you filled out for your IRA, and certain life insurance and annuity policies. So, if you forgot to remove him or her, maybe things will work out. It depends on who you named after him or her. Chances are, if you forgot to remove your ex, then you didn’t remember to add your new spouse.

However, Florida’s statutes have a big BUT…

They specifically don’t include Florida state retirement plans (such as a 403(b) or any other plan under the Florida Retirement System) or any plans covered by federal law, such as employer provided pension and retirement plans. That means your 401(k), profit sharing, and pension plans aren’t covered by Florida law.

Florida state retirement plans have their own rules, but, basically, whoever is on your beneficiary designation form gets the benefits. Oh, your ex-spouse is named and your current wife and children get nothing? Too bad, so sad. Forgot to name someone, or the person you named is dead? The state has rules to determine who gets your money. It may not be what you wanted.

Federal rules are just as bad. Any plan covered by ERISA is governed by the plan’s documents. Generally, the rules are designed to make administration quick and easy, so the person named on your beneficiary designation form wins. Each plan has its own rules for determining what happens if you forgot to name someone, or a named beneficiary is dead. If you have multiple accounts, they could each have different rules.

So, whether you’ve ever been divorced or not, make sure you periodically verify who your beneficiaries are in your estate planning documents, and on every account, plan, or policy that has a beneficiary form.

Other articles you may find interesting:

Bored? Review Your Estate Plan

Creating an End-of-Life Checklist

***Want to learn more about how to protect your family from the government, lawsuits, accidental disinheritance, or nursing homes? Click THIS LINK to book a seat at one of our upcoming fun and educational workshops.***

What Types of Senior Care are Available for Veterans?

veteran benefits
VA Aid & Attendance can help defray the costs of senior care.

The U.S. Department of Veterans Affairs offers some funding programs that can help offset the cost of some types of senior care.

U.S. News & World Report’s recent article, “Veteran Benefits for Assisted Living,” explains that many senior living companies try to help many veterans maximize their benefits, which in some cases can significantly reduce the cost of senior living.

Note that the VA won’t pay for a veteran’s rent in an assisted living facility. However, VA benefits may pay for some of the extra services required, like nursing assistance, help with bathing and toileting, and possibly meals.

There are a variety of benefits that may help, based on a vet’s specific service history and eligibility. The most commonly used benefits are the Aid & Attendance Pension. Another common benefit is the Survivor’s Pension for spouses of a deceased veteran with wartime service.

The VA’s Aid & Attendance and Housebound program is part of the pension benefits paid to low-income veterans and surviving spouses. The VA says these benefits are paid in addition to a monthly pension to veterans or their surviving un-remarried spouses. A vet must meet certain military service conditions, and also satisfy one of the potential medical conditions, including:

  • Requiring the aid of another person to perform personal functions, like bathing, dressing, eating, toileting, or staying safe from hazards;
  • Being disabled and bedridden, above what would be thought of as recovery from a course of treatment, such as surgery;
  • Being a patient in a nursing home due to physical or mental incapacity; or
  • Having very poor eyesight (5/200 corrected visual acuity or less in both eyes) or a field of vision limited to five degrees or less.

Vets may qualify for these benefits, which are added to the standard monthly low-income pension, when he or she is “substantially confined to your immediate premises because of permanent disability,” the VA says. Eligibility for the program is based on a case by case basis and involves a review by the VA.

It’s important to begin the application process early, rather than waiting for a crisis to occur. Ask an experienced estate planning or elder law attorney to help you and to discuss your options.

Other articles you may find interesting: 

What is a Title II or NFA firearm?

Tax Implications of a Medicaid Personal Service Contract

***Want to learn more about how to protect your family from the government, lawsuits, accidental disinheritance, or nursing homes? Click THIS LINK to book a seat at one of our upcoming fun and educational workshops.***

What’s a Lady Bird Deed?

In this video, Cindy explains what a lady bird deed is, and when it may be an appropriate arrow in your estate planning quiver.

Other videos you may find interesting:

Welcome to Manasota Elder Law’s YouTube Channel

Durable Power of Attorney: What You Need to Know

***Want to learn more about how to protect your family from the government, lawsuits, accidental disinheritance, or nursing homes? Click THIS LINK to book a seat at one of our upcoming fun and educational workshops.***

Don’t Give Your House to Your Kids

Don’t give your house to your child – it’s almost always a bad idea.

I see this all the time – a parent wants to make sure his or her adult children get the Florida house without going through probate. So, do they call an estate planning attorney? Of course not – lawyers cost money!

Instead, they consult with their neighbors, their Facebook friends, their second cousin’s nephew who practices corporate law in NYC, and, of course, Google, to see what they should do. Relying on this “free” legal advice, they download a fill-in-the blank quitclaim deed, complete and record it, and think they solved their problem.

No, as this article outlines, they likely just made things much worse. And now someone will likely either have to pay a lawyer a lot more to fix it, or the government and/or the nursing home will receive a lot more money than they would have if things had been done correctly.

The parent had good intentions. But he or she was focused on only one thing – avoiding probate (which, as the article points out, is fairly onerous in Florida). But the parent didn’t see the forest for the trees.

Probate is just one tiny issue in the huge estate planning puzzle. Did the parent consider what would happen if he or she needs nursing home care? Or what would happen if one of the children named on the deed dies? Or is sued or divorced? Or needs government benefits? Or has a child applying for college (the house is now considered the child’s parent’s asset). And what about taxes? Does it make more sense financially for your children to pay a $32,000 tax bill or a $5,000 probate bill?

The article mentions that life estate deeds or “transfer on death” deeds (we call them ladybird deeds in Florida) are a good option. Maybe, maybe not. They can also present problems.

An experienced estate planning and elder law attorney can help you recognize and address the pros and cons of every possible choice. There’s no one-size-fits-all when it comes to estate planning. Don’t be penny wise and pound foolish.

Other articles you may find interesting:

To Probate or Not to Probate?

Titling Property Correctly for Your Estate Plan

***Want to learn more about how to protect your family from the government, lawsuits, accidental disinheritance, or nursing homes? Click THIS LINK to book a seat at one of our upcoming fun and educational workshops.***

Durable Power of Attorney: What You Need to Know

In this video, Cindy talks about Florida Durable Powers of Attorney – what they are, why they’re needed, how they work.

Other videos you may find interesting:

Welcome to Manasota Elder Law’s YouTube Channel

What’s a Per Stirpes?

***Want to learn more about how to protect your family from the government, lawsuits, accidental disinheritance, or nursing homes? Click THIS LINK to book a seat at one of our upcoming fun and educational workshops.***

Welcome to Manasota Elder Law’s YouTube Channel

As of May 1, 2020, the Law Offices of Cynthia M. Clark is changing its name to Manasota Elder Law. Since it is the 21st century, in addition to written blog articles, we’ll also be posting (very!) informal vlogs – video blogs. At some point, we plan to get a bit better microphone and camera, and have each video transcribed for those who prefer reading. But you have to start somewhere. 🙂

Here’s a brief welcome and the first vlog. We hope you enjoy them, and if you do, please “Like,” share, and Subscribe to the Manasota Elder Law YouTube channel!

***Want to learn more about how to protect your family from the government, lawsuits, accidental disinheritance, or nursing homes? Click THIS LINK to book a seat at one of our upcoming fun and educational workshops.***